In State National Bank of Big Spring v. Lew,  the United States Court of Appeals for the District of Columbia Circuit ruled that the plaintiff had standing to challenge the constitutionality of the CFPB.  The Court made quick work of the question, noting that the CFPB has imposed additional obligations on the plaintiff which created standing.  Separately, the Court ruled that the questions was ripe, and the plaintiff did not have to wait for an enforcement action.  The Court noted that it would make little sense to force a regulated entity to violate a law (and thereby trigger an enforcement action against it) simply so that the regulated entity can challenge the constitutionality of the regulating agency.

The plaintiff also contested the legality of President Obama’s recess appointment of the Bureau’s Director, Richard Cordray. Because of that allegedly illegal recess appointment, the plaintiff claims that the Bureau has operated in an unconstitutional manner. The Court ruled that, for the same reasons that the plaintiff has standing to challenge the constitutionality of the Bureau, the plaintiff has standing to challenge Director Cordray’s recess appointment.  Further, the Court said for the same reasons that the plaintiff’s challenge to the Bureau is ripe, the plaintiff’s challenge to Cordray’s recess appointment is likewise ripe.

The Court also ruled that the plaintiff did not have standing to challenge the constitutionality of the Financial Stability Oversight Council, or FSOC.  The plaintiff claimed FSOCs designation of GE Capital as “too big to fail” gave GE, a competitor of plaintiff, a funding advantage.  The Court said the problem with that novel theory is that the link between (i) the enhanced regulation of GE Capital, (ii) any alleged reputational benefit to GE Capital, and (iii) any harm to State National Bank is simply too attenuated and speculative to show the causation necessary to support standing.